RINL's 6.3 mtpa expansion sees Rs 3,599 crore cost overrun
New Delhi: Rashtriya Ispat Nigam's Rs 8,692 crore plan to expand annual production capacity to 6.3 million tonnes has seen cost overrun of 41.4 percent, or Rs 3,599 crore, as on March 31, 2012, due to delays.
The state-run steel maker's plan to enhance capacity from three million tonnes per annum with Rs 8,692 crore investment got approval in October, 2005, and the entire work was supposed to be completed in four years.
However, according to Ministry of Statistics, the project would have a 41.41 percent cost overrun or Rs 3,599 crore, taking the total cost of the expansion to Rs 12,291 crore. It, though, did not specify any time-line for completion of the project.
On the status of expansion, RINL on its website said, "The entire expansion with the commissioning of balance units is likely to be on stream progressively from financial year 2013-14."
Meanwhile, Steel Authority of India's capacity expansion at ISSCO plant with Rs 14,443 crore has also gone up by 13.61 percent to Rs 16,408 crore, as on March 31, 2012.
ISSCO's expansion plan was approved in February, 2008 and it was initially supposed to be commissioned by the end of 2011.
Ministry of Statistics said as many as 179 projects being monitored by it reported cost overrun of around Rs 1.23 lakh crore during 11th Five-Year Plan as on March 31, 2012.
The primary reasons include under estimation of original cost, change in foreign exchange rates and statutory duties among others.